Wasatch Front renters have some good news and some not so good news, according to a new report from Wadsworth Multifamily, an apartment brokerage firm in Salt Lake City.
The good news: more rental units across the area are offering more incentives for potential tenants, like two months of free rent if they sign a new lease. Also, rental prices in Utah County also dropped slightly — around 1.7 percent — compared to this time last year. Here’s more good news: wage growth exceeded rent growth in Salt Lake, Davis, Weber and Utah counties.
The bad news is more of what’s familiar to renters: from Q2 of 2023 to Q2 of 2024, rental prices in Salt Lake County went up 1.5 percent, and rental rates in Davis and Weber counties went up by roughly 1.3 percent, according to the report. These increases are taking place despite a growing number of new rental units being built.
However, even with Salt Lake, Davis and Weber’s average rent prices increasing, the report shows that rental rates have largely leveled off, a far cry from the previous spikes in rent prices that began in 2020.
To no one’s surprise, the report found it’s still cheaper to rent instead of buy property in Salt Lake, Davis, Weber and Utah counties, driven by stubbornly high home prices and interest rates that have only recently fallen after reaching the highest level in over two decades.
Salt Lake County
For renters in Utah’s largest county, specifically, rent prices quietly grew by 1.5 percent on average through Q2 of 2024 compared to 2023, the report says. Total market vacancy also grew to 7.1 percent in Salt Lake County, the highest level since 2020 and second-highest since at least 2014.
Vacancy rates are higher when including newly built apartment buildings. The rate for stabilized buildings is 3%.
The report says the price increases are occurring during a “record pace” of apartment growth, as over 13,500 units are currently under construction, and roughly 25,000 are planned. However, many new construction projects will likely be delayed due to interest rates and growing construction costs.
Downtown continues to have the highest vacancy rates in the city. The Wadsworth Multifamily report says an average of 11 percent of units downtown are vacant, and new tenants average about a month of concessions when they sign a lease — and possibly up to 10 weeks of free rent at some properties.
Home prices continue to grow, too, as the report says the median home price in Salt Lake County is $550,000 — an increase of 5.5 percent, or $30,000, from this time last year.
Davis and Weber counties
Rent grew 1.3 percent in Davis and Weber counties in the second quarter. That’s up from 0.8 percent a year earlier, but still well below the historical average. (Rent grew 6.3 percent in the second quarter of 2019, for example.)
However, the report notes that, “rents in the Ogden area have been fairly flat since reaching a peak of $1,616 per month in the fall of 2022.” Total vacancies in Davis and Weber average around 8.7 percent, which is a jump from 6.3 percent last year. When adjusted for new units in lease-up, the vacancy rate is around 3.7 percent.
The two counties added roughly 2,350 new units in 2023, and an estimated 3,500 units are under construction. Around 8,500 units have been planned, the report says. Since January, the median single-family home price has grown by 2.5 percent, growing the price to $485,000.
Utah County
Unlike other counties along the Wasatch, rent prices in Utah County went down by 1.7 percent — which equates to a roughly $28 monthly drop — compared to last year. Despite that decrease, the county’s average rent is roughly $1,649 per month, which is 30 percent higher than what it was in 2020.
The recent fall in average rent is likely due to the increase in new units being built, as the report says there are over 4,400 units under construction in Utah County, with another 9,900 being planned.
Vacancy in Utah County is estimated to be around 8.6%, and after adjustments for new properties in lease-up, that number falls to around 3.1 percent. Concessions in the county average around two weeks of free rent, though some properties are offering up to eight weeks free for new residents.
Utah County’s median home price increased 4.2 percent since last year, bringing the average price to $506,000.
